MONDAY, 11/29/99 ~ MORNING EDITION

Cost pressures set for a return, radiologists warn

By John C. Hayes

Cost pressures that threatened radiology in the mid-1990s have been in abeyance for a couple of years, but are primed for a return, speakers told a refresher course audience Sunday.

Health insurance premiums are increasing by 5% annually nationwide and at double-digit rates in some areas, said Dr. Derace Schaffer, a director for Radiologix, a physician practice management company. This, combined with a national election that may focus attention on healthcare reform, promises to revive a managed-care cost crackdown that took place from 1994 to 1996.

"The relative peace of the last year is going to decrease because of the national election and employers who are being hit with double-digit premium increases," Schaffer said.

Co-presenter Dr. Elias Zerhouni, of Johns Hopkins, concurred.

"The pressure on premiums will increase," Zerhouni said. Radiology is particularly vulnerable to managed care, he added.

Having weathered tough times in the mid-1990s, many radiologists have breathed easier in recent years. The job market improved and managed care seemed to have slowed its advance. But that era may soon end, Schaffer warned.

With rising healthcare premiums, employers will again ask, "What's happening here? Where are you going to restrict costs?" Schaffer said. One solution may be an expansion of capitation.

Taking the California experience with managed care nationwide could cut RVU service levels in half, Schaffer said. Putting half of the nation under capitation could save $450 billion per year. A study by Medical Economics concluded that putting the entire nation's population under capitation would reduce the need for radiologists, who now number about 25,000, by 10,000, he said.

Both radiologists outlined strategies to respond to a tougher economic environment. Zerhouni said academic departments should focus on innovation; squeezing costs will not be the ultimate solution.